Shifting Fortunes: Google and Cyworld

A couple of stories popped up on Naver search yesterday that suggest how much the ground has shifted beneath Cyworld’s feet, and the challenges it faces in regaining its mojo.

First, from edaily, comes this speculative report that Google’s recent change in CEO could have an intriguing impact on the country’s approach to Korea. Google’s relative failure in social media is widely believed to have been a key factor in the company’s recent decision to replace Eric Schmidt with Larry Page. And with Google co-founder Sergey Brin now reportedly devoting himself to fixing Google’s social strategy, the edaily piece surmises, not unreasonably, that Google’s big new SNS focus could be mobile.

Engaging in a little more interesting but unsourced speculation, the story opines that Korea would be an ideal testbed for any new mobile-focused SNS services from Google. Why? For one thing, though Google remains no more than a bit-part player among PC portals, it’s enjoyed explosive mobile growth in Korea with the increasing adoption of Android-based smartphones. For another, though Korea was something of a latecomer to the smartphone party, it’s had one of the world’s highest growth rates in iPhone sales over the last year or so. For yet another, while Korean companies still dominate the PC portal market, they are playing catchup with SNS services, particularly in the mobile sector. Assuming FB and Twitter don’t swat aside everything in their path, this means there could still be room for strong new competitors.

Meanwhile, over on The Daily Focus, So Seong-ryeol reports that Cyworld is set for another crack at international markets. Quoting Lee Tae-sin, a director of SNS at Cyworld parent SK Communications, the story says that SK is planning to open up Cyworld services around the world by the end of the year, but doesn’t yet know exactly where or when. As for Cyworld’s big selling point, SK says no more than it plans to position Cyworld as “a platform for a smart social life.”

A screenshot from Cyworld

Sadly for a service that was a true SNS pioneer, it’s hard to feel overly confident in its global aspirations. As Korea watchers will no doubt be aware, this is not the first time the service has tried to replicate its huge Korean success overseas, and the first really didn’t panout.

I genuinely don’t like taking potshots at iffy English (not least because my Korean’s very far from perfect), but this mangled notice announcing Cyworld’s closure in the US bears repeating, if only because of the insights it offers about why they might have failed to take off there.

In a somewhat cruel twist, Cyworld’s closure in the US coincided almost exactly with the arrival of the iPhone in Korea, an event that has arguably done more than anything else to threaten Cyworld’s grip on its home market.

As recently as late 2009, it was received wisdom that Facebook would never succeed in Korea, and that Google was doomed to be an online also-ran for ever more. Yet less than two years later, a Korean media outlet is speculating that the country would be the ideal testbed for an as-yet unconfirmed SNS service from a company with no real track record in delivering them. Whether or not Google does end up using Korea as a testing ground, the fact that it is now considered possible shows how much better things are looking for Google in Korea these days — and, perhaps, how much worse for Cyworld.

UPDATE: Victor, over at Seoul Space, brought my attention to this JoongAng Daily article about Cyworld’s decline. The word “precipitous” springs to mind.